Key Takeaways Pure Storage Q2 EPS of $0.43 beat estimates, with revenue up 13% to $861M.Growth driven by FlashBlade, software adoption and subscription services momentum.Fiscal 2026 revenue outlook raised to $3.6B-$3.63B, up 14% year over year at midpoint.Pure Storage ((PSTG) reported second-quarter fiscal 2026 non-GAAP earnings per share (EPS) of 43 cents, which beat the Zacks Consensus Estimate by 10.3%. The company had posted non-GAAP EPS of 44 cents in the prior-year quarter.Quarterly revenues grew 13% ...

Pure Storage (PSTG) Q2 2026 Earnings Call August 27, 2025 05:00 PM ET Company ParticipantsPaul Ziots - VP - IRCharles Giancarlo - Chairman & CEOTarek Robbiati - CFOAmit Daryanani - Senior MD - Equity ResearchJason Ader - Co-Group Head - Technology, Media & CommunicationsEddy Orabi - Vice PresidentRob Lee - Chief Technology OfficerSimon Leopold - Managing DirectorErik Woodring - MD - Equity ResearchRuplu Bhattacharya - DirectorAsiya Merchant - Technology Equity ResearchDavid Vogt - Managing DirectorConferenc ...

Key Takeaways Western Digital's non-GAAP gross margin rose to 39.4% in fiscal 2025, with operating income up 578%.Spinning off SanDisk and rising nearline demand boosted margins, cash flow and financial strength.WDC guides Q1 revenue of $2.7B, gross margin of 41-42% and EPS of $1.54 at midpoint.Western Digital Corporation (WDC) has surprised investors with a strong turnaround in profitability over the past year. After struggling through the memory downturn and heavy losses in fiscal 2024, the company has bo ...

Core Insights - Super Micro Computer (SMCI) stock has declined by 25.6% following its fourth-quarter fiscal 2025 earnings report, which showed non-GAAP earnings of 41 cents per share, missing the Zacks Consensus Estimate by 6.8% [1][6] - The stock is currently undervalued compared to the Zacks Computer-Storage Devices industry, trading at a forward 12-month P/E ratio of 19.2X, lower than the industry's 25.08X [2] Competition and Market Position - SMCI faces increasing competition from major players in the storage and server market, including Pure Storage, Dell Technologies, and Hewlett Packard Enterprise [3] - Dell Technologies reported orders worth $12.1 billion for AI servers in Q1 fiscal 2026, which increased to $14.4 billion in AI backlogs, highlighting the competitive landscape [4] Financial Performance and Margins - SMCI's server segment sales grew by 6% year over year, driven by strong demand for AI servers [7] - The company is experiencing margin compression due to competitive pricing, client delays, and rising production costs, with a non-GAAP gross margin contraction of 70 basis points year over year in Q4 fiscal 2025 [8][9] - High inventory reserves for older-generation products and increased upfront costs for production ramp-up are further pressuring margins [10][11] Earnings Estimates - The Zacks Consensus Estimates for SMCI's first-quarter fiscal 2026 earnings is 47 cents, indicating a year-over-year decline of 37.3% [11] - Year-over-year growth estimates for the current year and next year are 23.30% and 29.21%, respectively [12] Long-Term Prospects - Despite current challenges, SMCI's long-term growth prospects remain strong, particularly in the AI-driven solutions market [13][14] - The company's expertise in integrating advanced graphics processing units positions it well for future growth as enterprises expand their data centers [15] Conclusion - While SMCI is facing near-term challenges, its long-term outlook is positive, supported by high demand for its AI-driven solutions and energy-efficient server systems [16]

Core Insights - The rapid adoption of Agentic AI is increasing the demand for unstructured data storage, with Western Digital Corporation (WDC) leveraging this technology to enhance product development and efficiency [1][2] - The demand for scalable storage solutions is rising as data becomes crucial for AI-driven innovation, with HDDs providing unmatched cost efficiency and reliability [2] - WDC's product demand is growing, with significant shipments of high-capacity drives, reflecting a strong market position [3][5] Company Performance - WDC reported a 30% year-over-year revenue increase to $2.61 billion, driven by high-capacity HDD storage for cloud and generative AI workloads [5][10] - The company projects a 22% year-over-year revenue growth for the fiscal first quarter, estimating revenues of $2.7 billion (+/- $100 million) [5][10] - Shipments of PMR drives exceeding 26 terabytes more than doubled sequentially, surpassing 1.7 million units in the June quarter [3][10] Competitive Landscape - WDC competes with major players like Seagate Technology and Pure Storage in the storage and data market [6] - Seagate reported a 30% year-over-year revenue increase to $2.44 billion, driven by demand from cloud, AI, and edge computing [8] - Pure Storage focuses on software-defined all-flash solutions, enhancing performance for unstructured data workloads [9] Market Outlook - WDC's platforms business is accelerating due to the growth of AI, positioning the company to serve infrastructure providers and AI companies [4] - Despite macroeconomic uncertainties, WDC expects revenues to grow 11% to $3.5 billion for fiscal 2026, supported by strong demand for its product offerings [11] - WDC shares have gained 18.4% over the past year, outperforming the Zacks Computer-Storage Devices industry [12]

Core Insights - Super Micro Computer (SMCI) stock has increased by 69.3% over the past three months, outperforming the Zacks Computer-Storage Devices industry's return of 54.8% [1][6] - The stock is currently considered overvalued, trading at a forward 12 months P/E ratio of 19.49X, compared to the industry's 18.59X [4][6] Performance and Valuation - SMCI's stock has shown high volatility, with a significant price increase recently [4] - The gross margin for SMCI has been inconsistent, with a decline of 590 basis points year-over-year and 220 basis points sequentially to 9.7% in Q3 FY25 [11][13] Competitive Landscape - SMCI faces strong competition from major players in the storage and server market, including Pure Storage, Dell Technologies, and Hewlett Packard Enterprise [7][8] - Dell Technologies reported a 16% year-over-year growth in AI-optimized servers, with orders worth $12.1 billion for AI servers in Q1 FY26 [8] Margin Pressures - The company is experiencing margin contraction due to rising competition, price cuts, and delayed transitions to AI platforms [6][9] - High inventory reserves for older-generation products and increased costs associated with new product ramp-ups are contributing to margin pressures [11][13] Earnings Estimates - The Zacks Consensus Estimates for SMCI's fiscal 2025 bottom line is projected at $2.07, indicating a year-over-year decline of 6.33% [13][14] - Year-over-year growth estimates for the next fiscal year show a potential increase of 26.33% [14] Conclusion - Given the current challenges, including delayed purchasing decisions and margin contraction, the recommendation is to avoid investing in SMCI stock at this time [15]

Core Insights - Super Micro Computer (SMCI) shares have shown volatility but have returned 34.1% year-to-date, outperforming the Zacks Computer-Storage Devices industry's decline of 0.3% in the same period [1][6]. Financial Performance - SMCI is currently trading at a discounted valuation with a forward 12-month price-to-earnings (P/E) ratio of 14.6X, lower than the industry average of 26.82X [2]. - The company's server revenues increased by 19% year-over-year, reaching $4.5 billion in Q3 FY25, driven by strong demand for AI servers [6][7]. Market Dynamics - The enterprise data center customer vertical generated $1.9 billion in revenues, accounting for 42% of total revenues in Q3 FY25, up from 25% in the previous quarter, indicating a growing representation of AI products in sales [9]. - SMCI is expanding its global manufacturing capabilities in Malaysia, Taiwan, and Europe to enhance deployment and mitigate geopolitical risks [10]. Competitive Landscape - SMCI faces significant competition from major players like Pure Storage, Dell Technologies, and Hewlett Packard Enterprise, which are also experiencing growth in AI-optimized servers [12][13]. - The company is encountering margin pressure due to pricing competition and inventory write-downs on older-generation GPUs, affecting its near-term outlook [14]. Earnings Estimates - The Zacks Consensus Estimate for SMCI's fiscal 2025 earnings indicates a year-over-year decline of 6.33%, with downward revisions in estimates over the past 30 days [15][16].

Core Insights - Super Micro Computer's (SMCI) server and storage system revenues grew 19% year over year in Q3 FY25, surpassing $4.5 billion, driven by demand from hyperscalers and AI clients [1][11] - The company's direct liquid cooling products for data centers are a significant contributor, with production exceeding 2000 DLC racks per month [2] - Recent product launches, including Data Center Building Block Solutions (DCBBS) and petascale storage systems, are expected to enhance future growth [3] Revenue and Growth - The server and storage system segment accounted for 97% of SMCI's total revenue, indicating a strong reliance on this area for overall performance [1] - The Zacks Consensus Estimate for SMCI's fiscal 2025 revenues is projected at $22.12 billion, reflecting a year-over-year growth of 48% [5] Competitive Landscape - The global storage and server market features competitors like Pure Storage and Hewlett Packard Enterprise, with Pure Storage focusing on modern storage solutions and HPE experiencing a 6% year-over-year growth in server sales due to AI demand [6][7] - The enterprise server market is anticipated to grow at a CAGR of 8.03% from 2025 to 2030, reaching $139.81 billion, presenting significant opportunities for SMCI and its competitors [8] Manufacturing and Expansion - SMCI is expanding its global manufacturing capabilities in Malaysia, Taiwan, and Europe to enhance deployment and navigate geopolitical and tariff challenges [4][11] Valuation and Performance - SMCI shares have increased by 43.3% year to date, contrasting with a 3.2% decline in the Zacks Computer-Storage Devices industry [9] - The company trades at a forward price-to-sales ratio of 0.87X, significantly lower than the industry average of 1.61X, indicating potential undervaluation [12]

Summary of Pure Storage (PSTG) 2025 Conference Company Overview - **Company**: Pure Storage (PSTG) - **Event**: BFA's Global Tech Conference - **Date**: June 03, 2025 Key Industry Insights - **Industry**: Enterprise Storage - **Market Size**: The enterprise storage market is approximately $50 billion, with Pure Storage currently holding over $3 billion in revenue, indicating a significant growth opportunity of around $47 billion to $57 billion [12][13]. Core Points and Arguments 1. **Macro Environment Uncertainty**: The macroeconomic and geopolitical landscape is highly uncertain, affecting customer conversations and projections for the second half of the year [3][4]. 2. **AI's Impact on Storage**: AI is expected to transform the storage industry, with a shift in focus from software to data. Pure Storage's new product, FlashBlade Exa, is designed for high-performance environments, particularly for AI applications [5][6][10]. 3. **Enterprise vs. Hyperscale Opportunities**: While AI-related storage is currently a small segment (estimated at $2 billion), it is expected to grow. However, the larger opportunity lies in the enterprise environment, which may not require specialized storage [12][13]. 4. **Hyperscale Market Potential**: The top five hyperscalers account for 60-70% of the total hard disk market, representing a significant opportunity for Pure Storage. The company has secured a design win with Meta, aiming to ship 1-2 exabytes in the near term [15][16][17]. 5. **Total Cost of Ownership (TCO)**: Pure Storage emphasizes its competitive TCO compared to hard disk drives (HDDs), highlighting advantages in density, performance, and lower failure rates [25][32][34]. 6. **NAND Supply Chain Management**: The company is working closely with major suppliers (Micron, Kioxia, Hynix) to ensure adequate NAND supply for future growth, despite the ramp-up period required [36][37]. 7. **Investment Strategy**: Pure Storage is currently in an investment phase, focusing on R&D and market penetration, which may compress margins temporarily. The company aims to resume margin expansion in the following year [41][42]. 8. **Tariff Uncertainty**: Ongoing tariff changes create additional uncertainty in the market, but Pure Storage has a flexible supply chain to manage potential impacts [44][45]. Additional Important Insights - **Product Pricing Strategy**: The lower gross margins on the E Series product are part of a strategy to penetrate lower-tier storage markets aggressively [51][52]. - **Future Growth Confidence**: The introduction of PureFusion allows customers to manage their storage as a cloud, potentially creating a network effect in enterprise storage [56]. This summary encapsulates the key points discussed during the conference, providing insights into Pure Storage's strategic positioning and market opportunities.